Depending on which part of the whiskey industry you work in, time is either your friend or your enemy. To a master blender, it’s a decade before some whiskeys start to get interesting, on the other hand, if you’re an investor, 10 or even 15 years is a hell of a wait for a return.“There’s no business like it in the world,” says Dr John Teeling, chairman and founder of Cooley Distillery. “For three years you do nothing but spend money and you can’t sell anything. If I knew then what I know now … ”He laughs, empties a paper cup and glances at his watch. His flight to Dublin leaves in 10 minutes, time for one more diet coke.I’ve met John Teeling now on numerous occasions and I’m convinced he runs on caffeine. When he’s not guest lecturing at Cork University, he’s playing international over-40s rugby, drilling for oil, digging for gold and, of course, running Ireland’s only independent distillery, situated on the Cooley peninsula in County Louth.Oh, and he’s a teetotaller.“No other business like it … ”He’s back, picking up the conversation exactly where he left off.“You see, in my innocence I thought we could bottle the stuff after exactly three years and a day!” He laughs again.The year is 1992, the location John Locke’s picture-postcard distillery in Kilbeggan in the Irish midlands. These are the oldest distillery buildings on the island, and although no whiskey has been made here since the 1950s, this is where Cooley matures its stock.The first casks were filled in 1989 and funnily enough, a little over three years later and John Locke’s granddaughter was tapping into one.“Spirits were high,” remembers Teeling. Pernod Ricard had just taken over Irish Distillers, who until the arrival of Cooley had enjoyed a monopoly. Now, new markets for Irish whiskey would open up. What’s more, the Scottish industry was enjoying something of a boom. If ever there was a good time to be making whiskey, this was it.“We’d made it,” remembers managing director David Hynes. “Now the hard work would begin.”But the US economy was slowing and the Thatcher boom grinding to a halt. Negative equity bit home and the Scotch industry started to tighten its belt, with Rosebank, Bladnoch and Inverleven falling by the wayside. And as everyone knows, when the United Kingdom sneezes, Ireland catches a cold.Cooley had generated a lot of capital through the Business Expansion Scheme (BES), which allowed Irish taxpayers to offset an investment of up to £25,000 a year against their tax bill.But the Irish government pulled the BES overnight, leaving Cooley out on a financial limb. By the year’s end Teeling had no choice but to mothball the distillery.“Those were pretty desolate days,” remembers Hynes. “I knew we had good product, and I knew there was a light at the end of the tunnel. I just didn’t know if it was an oncoming train.” It was.With their purchase of Irish Distillers Ltd (IDL), Pernod Ricard had basically bought the entire Irish whiskey business; now for very little extra it could mop up the fledgling Cooley. They made Teeling an offer he simply could not refuse: £24.5 million.This was a hell of a return; Teeling knew it and wanted to accept. Over the following weeks a most bizarre soap unfolded across the evening news. In the red corner, IDL boss Richard Burrows was totally honest when asked about the plans for Cooley. Everyone would lose their jobs and the distillery would be bulldozed.In the blue corner, Teeling said his job wasn’t to create employment, but to create wealth.And caught in the middle, a very drunk workforce, led by master distiller Noel Sweeney, cried on the evening news. This was heart-breaking stuff, made all the worse by the uncertainty which followed Pernod’s offer being referred to the Irish Competition Authority.It was a cold, wet Friday in 1994 when the Competition Authority finally announced its findings, and you could have knocked both Burrows and Teeling over with a very small feather.The Pernod offer was rejected. The Authority felt that Cooley wasn’t worth £24.5 million, and that this inflated price showed that IDL were simply interested in protecting their monopoly. The deal was off, but what next?“To say we were financially knackered would be an understatement,” says Hynes.“The future didn’t look promising.”With the French off the scene and no other knight in shining armour around, the Irish banks started to call in their debts. So began one of Ireland’s most remarkable ‘business snatched from the jaws of death’ stories.In under a week, Teeling managed to convince both his American and German agents to pre-buy £2 million of stock. The directors then reached into their own pockets, and the banks backed off. But it was Cooley’s move into the retailer own-brand sector that secured the future of
the distillery.“It was the key to success,” says Hynes. “It gave us volume sales and most importantly it gave us turnover.”By 1995 Teeling was confident enough to fire up the stills, and to this day the distillery hasn’t stopped production.Cooley is a rare breed. A small, independent distillery in a world of multinational drinks companies. As such, its hard-won success makes it ripe for a take-over. The list of suitors so far includes Seagram, Guinness, Grant’s, Burn Stewart and, most recently, the people behind
Angostura bitters.“All the hard work has been done,” says Teeling. “We are now making money and we have the maturing stock.” But he admits he is under pressure.“It’s a good business now, and getting better. This is not the time to sell, but after 15 years of holding their investment, some smaller shareholders may want to see a return. If they had put their money into housing rather than whiskey, they’d have seen a huge return over the same period.”This lies at the core of Cooley’s current dilemma. The people who work in the distillery have sweated blood to make it succeed, and now the company is turning a profit, do they sell? In reality, though, the debate is a non-starter, it’s simply a matter of time before Cooley is sold; in fact this year it all but happened.C L Financial is a $5-billion conglomerate based in Trinidad and Tobago. They run the world’s fifth largest rum company, they own the aforementioned Angostura Bitters and 29 per cent of the Scotch whisky company Burn Stewart.For most of 2002, Teeling and Hynes were in secret negotiations with CL Financial. In September a deal was finally agreed, CL Financial would pay €33 million for Cooley, and they had until 5pm on 25th September to make a formal offer for the Irish company.However, 5pm came and went and the fax remained silent. Five days later Cooley released a press release simply stating: ‘No offer for shares in Cooley has been received by the board.’“We talked at length, but in the end they just didn’t do it,” says Teeling. “I asked if it was a good offer.”Yes and no. When you consider that nine years earlier Irish Distillers offered the equivalent of € 32 million, you can guess where he is coming from.“But Angostura haven’t gone away,”Teeling adds. “When they finalise their take-over of Burn Stewart they might be back, but certainly not before then.”Teeling gathers his papers and we walk towards security.“We’re 14 years into the process and we need another five years before the fruits of our labours will really show. But to do that we’re going to have to double sales in the next five years.”The stone warehouses in Kilbeggan are full of maturing whiskey and the County Louth plant continues to distil the year round. But whiskey is only worth money if it’s sold, so if Cooley is to survive, let alone thrive, it will have to shift six million bottles a year by 2007.If this fazes Teeling, he doesn’t let on.“If you look at it, I have done it the wrong way around. Where are we weakest? In Ireland. You can easily buy our whiskey in Germany for example, yet we have very little presence on the domestic Irish market or in the UK. In the north of Ireland, for example, we sell nothing at all.”The retailer own-brand market saved Cooley from bankruptcy, but it was a barbed victory. Margins were tight and it gave the competition something to raise its eyebrows at.These days, however, things are a little different. For a start, Cooley has bought out the BES companies and now owns the whiskey it produces, so it can make a decent return, even on retailer own-brand.But, of course, the greatest return is on Cooley brands such as Tyrconnell, Locke’s Malt and Connemara. All these are currently in the middle of a brand make-over and this is the market Teeling is most anxious to expand.Another interesting development comes with the bottling of single cask Cooley malts. In their spring 2003 list, The Scotch Malt Whisky Society is launching two Irish malts: a dry, smoky 9-year-old and a 12-year-old unpeated whiskey.The latter is the oldest expression of Cooley malt available, and the good news is that these malts are taking middle age in their stride.“Smoky bacon crisps with carbolic soap” is how the ever-poetical Charles MacLean describes the first, while the unpeated is described as having a nose of “tinned fruit cocktail.” Both wowed cynical Scotch drinkers at the launch in the Edinburgh members’ room.Teeling takes my hand and shakes it firmly.“You know, it takes a lot of cases to make a decent return from Dunnes Stores or Tesco own brands,” he says.“At the same time, we recently bottled a limited edition of 1,000 bottles of our original distillate, it retails at €75 and it’s selling like hotcakes!“It doesn’t take a degree in business studies to work out which market you want to be in.”With that mission statement hanging in the air, he’s gone. Swept into security and spat out in the departures lounge, running for his plane, past shelves laden down with Paddy and Jameson.Well, after all, this is Cork.